Dive Brief:

• Dominion is heading into its second quarter expecting a slow return to normalcy for its electric utility loads in Virginia and South Carolina as businesses begin to emerge from the economic shutdown in response to COVID-19.
• South Carolina Gov. Henry McMaster recently announced an "AccelerateSC" approach to re-open the state, and is developing guidelines to lift indoor dining restrictions "as soon as possible," according to WIS News. Virginia is expected to open gradually as early as May 15, per comments from Gov. Ralph Northam on Monday.
• The company anticipates conditions will "slowly recover through late summer," rather than an "immediate snapback," Chief Financial Officer James Chapman said on the Q1 2020 financial earnings call. COVID-19's impact on Dominion's first quarter earnings was muted, he added, and the utility has continued to make progress on a number of projects, including offshore wind.

Dive Insight:

Dominion assumes the load in South Carolina "bottomed out" and is on the path to eventual recovery while the load in Virginia "prove[d] extremely resilient" since March, per Chapman.

The company added almost $5 billion of available or funded debt capital between March 16 and April 1, which the CFO said will not change long-term debt financing amounts or the annual capital expenditure guidance.

"As volatility in capital markets increased significantly in March, we moved quickly and opportunistically to enhance our liquidity position out of an abundance of caution," Chapman said.

"We had a little bit of pressure from doing things earlier within our plan than we would have expected otherwise," he told analysts, regarding the financing through short-term debt.

The company continues to look at options to mitigate COVID-19's financial impact throughout its operations, including a potential hiring freeze, Chapman said.  

Dominion also reported progress on a number of projects, such as the construction of its 12 MW offshore wind pilot.

"Despite the pandemic," components for the pilot arrived from Europe and plans to start installation this quarter remain on track, Dominion CEO Thomas Farrell said. The project is the first offshore wind project approved in federal waters by the U.S. Bureau of Ocean Energy Management and would be in commercial service by the year's end.

Dominion plans for a 2.6 GW offshore wind project in 2026 off the coast of Virginia, and could add another 2.6 GW of offshore wind in that service territory by around 2034, according to its latest long-term resource plan. Both projects would take advantage of recent state legislature which recommends the addition of 5.2 GW of offshore wind in the next 15 years, which may be 100% utility-owned.

Reacting to COVID-19, Dominion had pushed back its rate case in South Carolina from the spring to the fall, and is expected to file in August.

Data centers in Dominion's service region are starting to hit peak demand earlier in the year than usual, because they are running at higher capacities "probably from work-at-home" and other pandemic-related shifts in the workforce, Michael Weinstein, Credit Suisse analyst said on the call.

"We've had strong data center growth in our service territory for some time and expected strong data center growth for some time to come. And we have seen no slowdown in that at all," Robert Blue, Dominion's Executive Vice President and Co-Chief Operating Officer, said on the call.

Dominion owns the Atlantic Coast Pipeline Project with Duke Energy and is tracking several permits for construction. Farrell said progress continues despite COVID-19 conditions. In addition to permitting, Farrell said the construction requires a productive tree felling season from November to March, which can be done while other permits are pending — including one that is tied up at the U.S. Supreme Court.

The CEO anticipates the Supreme Court will rule in favor of the Atlantic Coast Pipeline, restoring "the authorization of the project to proceed along the existing route," crossing underneath the Appalachian Trail. Dominion also expects a number of vacated permits to be reissued soon, such as a biological opinion, which the U.S. Fish and Wildlife Service is expected to reissue by the end of this quarter, nearly a full year since the court invalidated the previous version in July.